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The Rough Notes Company Inc.



March 24
13:04 2020

Tactical Tech

By Chris Paradiso


Three ways existing clients can help grow your agency

If you are an agency owner like me, your main goal is to expand and grow your business. The challenge, as we all know, is that generating new business is expensive. But the good news is that technology exists today that allows your existing clients to help grow your business.

Growing an agency is a combination of closing net new business and dealing with any business you may lose in a given year.

For example, let’s take an agency that has a growth goal of 7% annually. This growth could come from a combination of new customers and new business from existing customers. Of course, the agency likely will lose some business—anything from individuals moving, to businesses closing, or clients shopping around. Say that loss represents 9% of the agency’s existing business; that means that to hit a 7% growth target the agency needs to bring in 16% more business.

As independent agents … our ability to deliver a consistent and exceptional experience across all channels is the critical differentiator in our business …

As we know, selling insurance is a tough job. Competition is intense—not just from the agency down the street, but also from online and toll-free competitors. It seems that everyone wants to sell the same thing to the same customers, often without any regard whatsoever for what the buyer may actually need.

As independent agents, it’s important to remember that our ability to deliver a consistent and exceptional experience across all channels is the critical differentiator in our business, particularly in the highly competitive personal lines sector.

Enter the loyalty score

To achieve ambitious growth goals, would your producers like a little extra insight into potential buyer behavior? For instance, would it help if they knew how loyal their current clients are or how predisposed those clients are to purchase more products? Would it be helpful to your producers to be able to rely on something other than memories of or notes from a prior conversation? What would they think about having access to a loyalty score of sorts, not based on a survey (although such scores are great indicators) but based on the client’s actual actions and recent interactions with the agency?

With an artificial intelligence (AI) machine learning platform, this is possible.

When I discuss this concept with agents in person, I often encounter some confusion. And that’s because when they hear the term “loyalty score,” many agents think of the Net Promoter Score, or NPS. That’s totally understandable. A Net Promoter Score comes from subjective feedback provided directly by customers.

To calculate an NPS, companies like Rocket Referrals will send your customers a simple survey asking them to rate their interactions with you on a scale of zero to 10. Scores correlate to the likelihood of someone renewing with or sharing positively about your agency. Challenges associated with such scoring include the fact that not everyone responds to the survey and also that feedback is based on memory.

The AI-based loyalty score is determined in a different manner and does not depend on feedback received directly from the customer. Instead it is calculated based on data that already exists in your agency management system, customer relationship management tool, phone call recordings and emails. Actually, NPS can come into play, as it and other external sources, such as claims history and social media activity, can be incorporated into the score.

An algorithm takes all of the internal and external data points I mentioned—and maybe more—and uses them to ascertain whether a customer is happy with your agency and how likely they are to renew or not renew their coverage. The technology even has the ability to read into the tone of voice, or sentiment, that a customer used on a call with a producer to ascertain if they were satisfied with your service by the time they hung up.

You don’t need to continually contact clients with surveys to understand how they feel about their coverages and your agency as a whole. Of course, that’s no excuse to avoid customers. You should reach out as part of your ongoing customer experience and engagement initiatives. But your ability to gauge customer loyalty does not depend on this, and having readily accessible data on client sentiment is invaluable.

In short, an AI machine learning platform can deliver highly accurate client loyalty insight based on a full range of customer experience data, and it can do so with amazing accuracy.

Knowledge and wisdom

British humorist, musician, columnist and broadcaster Miles Kingston is credited with saying: “Knowledge is knowing that a tomato is a fruit; wisdom is not putting it in a fruit salad.” In our business, it’s one thing to know a loyalty score. It’s another to know how to use it.

Having access to a loyalty score can help your producers understand how satisfied or dissatisfied their clients are at any given point in their customer journey—up until and including the present! Understanding the score can help a producer gauge the best time to have further discussions and also ascertain which products or topics may be of greatest interest to the customer.

There are at least three ways in which applying knowledge of a loyalty score can help your agency expand its reach and grow its business:

  • Account rounding. You have clients who you know have policies with other agencies. You aren’t protecting everything that’s important to them. These clients present a perfect opportunity to expand your book of business by upselling and cross-selling them.

The key is knowing when and what to offer your customers that will lead to cross-sell or up-sell opportunities. AI-based machine learning can do that—for instance, surfacing the fact that a client owns a motorcycle that your office knew nothing about. Having such insight is a good thing, because many agents lack the time or desire to reach out to existing customers to sell additional coverage. Some may feel uncomfortable; some just don’t believe the tactic will work; some might not even know where to start.

Having a loyalty score can give your producers the confidence they need to pick up the phone and engage with customers who present the best opportunity to write new business. Remember, account rounding should be viewed as low-hanging fruit; there are plenty of opportunities to cross-sell or up-sell within your current book.

  • More quality business with customers and carriers. All business isn’t necessarily “good” business. For the agency in the example to achieve its annual growth goal and bring in 16% more business, producers may be tempted to renew customers who are not a good fit for the agency and not a good risk for their carrier.

The notion of not renewing customers may sound counterproductive when the goal is growth. But the key metric carriers use to measure agency performance is the combined ratio. Over time, the loyalty score can be used to identify customers who may be contributing to a higher combined ratio for your carrier and who, in so doing, make your agency less attractive to the carrier.

At the same time, the loyalty score can help identify who within your book can be classified as excellent customers whom you want to focus on growing with and retaining.

  • Customer retention and loyalty. Keep your customers happy, and they will stay with you. If they feel you understand their situation without their having to explain it every time you talk to them, they will feel valued.

For example, suppose you have a client who recently started falling behind on premium payments. In this situation, the loyalty score would go down and your agent or CSR would be automatically notified. They could easily find out why this customer’s loyalty score is lower, without having to search through emails and billing and other systems.

This presents an opportunity for your team member to contact the customer and see what led to the payment problem. Perhaps they recently lost their job, or some other unforeseen event has created a cash flow issue for them. In this scenario, the producer or CSR could offer a different payment plan or make alternate arrangements.

The loyalty score also can help identify a happy or dissatisfied customer who is at risk of non-renewing or letting a policy lapse, providing a similar opportunity for the producer to reach out and address the situation.

Clients who believe their agent has their best interests in mind will be satisfied customers. By leveraging technology that exists today with customer data you already possess, it’s possible to calculate a loyalty score for each of your customers. Using these scores makes it easier for you and your team to identify and reach out to clients who can help as you work to expand your reach and grow your agency.

The author

Chris Paradiso is president of Paradiso Financial & Insurance Services in Stafford Springs, Connecticut. He also heads up Paradiso Presents, LLC, which provides social media consulting, seminars and workshops to help agencies thrive in the online marketing world. Contact Chris via email at

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